World Bank in corruption amnesty
Thursday, August 10, 2006, 16:58
It is offering an amnesty to firms, NGOs and individuals if they fully disclose past malpractice and promise to stick with the rules in future. Under the new scheme, they could bid for work on future World Bank funded schemes if they meet strict criteria. World Bank boss Paul Wolfowitz said it would "prevent and deter corruption".
The World Bank says it is trying to tackle corruption and weak governance, seeing it as a major obstacle to economic development in the world's least developed countries. It has barred 330 firms from working on projects it funds following fraud investigations by its Department of Institutional Integrity. Recently, it told Cambodia to repay more than $7m in funding given to development schemes after widespread corruption was uncovered.
The new initiative - called the Voluntary Disclosure Program - is designed to provide incentives for firms and individuals to admit past misconduct and to clean up their acts. The amnesty, for practices such as bribery, fraud, coercion and collusion, will guarantee confidentiality. The World Bank said the initiative would identify corrupt organizations and individuals and ensure its funds were spent properly. "While there are individual firms that may hope to profit, the private sector as a whole stands to lose when corruption is pervasive and the rule of law is undermined," Wolfowitz said. "The Voluntary Disclosure Program is a new tool that will help the Bank further its anti-corruption agenda in a practical and cost-effective way." To participate, parties must scrutinize their involvement in World Bank projects over the past five years, selective information about which will then be shared with World Bank members. Participants will then be subject to a three-year monitoring program, in which they must report progress annually to the World Bank.
During this time, firms can bid for work on its funded schemes. But if evidence of further misconduct emerges, firms will be barred from procurement schemes for ten years and could face other penalties. It is hoped that firms' revelations will alert officials to current malpractice as well as planned corruption in future projects. The initiative was welcomed by one anti-corruption organization. "When both ethics and economics favor greater transparency, real progress is possible," said Alexandra Wrage, president of Trace International. She said the program "should have a substantial and immediate impact on commercial bribery". But other bodies are concerned that companies will be let off too lightly and are unlikely to come forward while there is a risk of potential criminal prosecution should information be made public. (BBC News)